AISD gives first peek at $1.3 billion dollar budget

The Austin Independent School District gave the public its first look at next year’s budget Monday. But to many, the song is the same as it was last year: Employees need more money, property taxes are skyrocketing and the district is still crippled by the requirement that it send tax revenue to the state.

Ken Zarifis, president of Education Austin, kicked off public commentary at AISD’s Monday board meeting by advocating for “4 and 4.” The AISD employee union is supporting a 4 percent pay raise for all employees in 2016-2017 and another 4 percent raise for all employees in 2017-2018.

“We were able to work with the district and this board to get 3 percent for all employees, double of what had been recommended for half of the workforce (last year),” Zarifis said. “The challenges our employees face remain the same (as last year). That Austin is increasingly difficult to survive in is not the board’s fault, but to respond to that reality is this board’s responsibility.”

The reality Zarifis and many others refer to is Austin’s rising property values. AISD Superintendent Paul Cruz said that according to the district’s April 6 preliminary certified taxable property valuations, local property appraisal values are projected to increase by 14.94 percent compared to 2015 values.

This bump equates to a net increase of about $25 million in the district’s operating revenue, after subtracting a $133.3 million increase in recapture payments to the state.

In Texas’ school finance system, school districts deemed “property rich” send a portion of their residents’ tax revenue back to the state. Under the current formula, AISD sends more revenue back to the state than any other district. For Fiscal Year 2015-2016, the current fiscal year, AISD has sent $273 million back to state coffers. The district is projecting sending $406 million next year for the FY 2016-17 budget.

AISD’s FY 2016-17 proposed budget expenditure shows an increase of only 2 percent compared to the current year. That increase includes a $15 million recurring expense for a 3 percent raise for all regular full-time and part-time employees. Additionally, the budget includes $1.4 million for an increase in the district’s minimum hourly rate to $13 per hour.

In addition, the FY 2016-17 budget proposes decreasing AISD’s overall tax rate by 1 cent, bringing it to $1.19 per $100 of assessed property values. AISD has decreased its tax rate by 5 cents since the 2013-14 school year.

But, AISD Chief Financial Officer Nicole Conley is hedging the district’s bets. Conley said AISD is expected to lose another 1,300 students next year, making it the fourth consecutive year AISD has lost students. A portion of public school districts’ state funding is based on student population as well as attendance. Conley also said she was already using “aggressive” property tax revenue projections for the upcoming years, and she warned against drastic salary increases because the revenue increases will eventually slow down.

“I’ve looked at how our projections will hold in the next three years, and we still forecast a deficit, so if you increase your expenses you will have shortfalls in the out years. … If we do increase (salaries) substantially beyond the current 3 percent, you can probably add on $5 (million) to $10 million to the current deficits that are presented in the schedules you have in your binders tonight,” Conley said.

During public comment, several AISD teachers and employees stated that they hold down two to three jobs in order to live in Austin. Some said they live in affordable housing and cannot afford internet services, or that given the salaries AISD pays them, their children qualify for free or reduced-cost lunches.

After hearing the testimony, many trustees requested that district staff take a closer look at employee raises and provide projections for a possible one-time wage bump or a recurring 4 or 5 percent raise, or explore an alternative salary model.

“What you’ve heard here is just the tip of the iceberg, in terms of what teachers are having to go through to survive in this city, and it’s getting progressively worse,” said District 3 Trustee Ann Teich. “We are losing really good talent. I urge that we really explore 4 percent, possibly 5 percent (increases). … If we are going to talk about what really impacts students, it is our teachers.”

Staff will hold community meetings regarding the budget on May 9, 11 a.m., at the Baker Center, 3908 Avenue B, and on May 11, 6 p.m., at the Carruth Administration Complex board room, 1111 W. Sixth St. AISD staff will present the district’s recommended budget May 23 and adopt the final budget June 30.

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